By David M. Kinchen
Editor, Huntington News Network
Mike Keracher, left and Tony Isbell of RealtyBid.com |
With the bursting of the real estate price bubble in most of the country, you’d expect to find a firm that markets real estate through online auctions to be suffering.
You’d be wrong in the case of Gadsden, Alabama-area-based RealtyBid.com. This is a firm that was part of the dotcom revolution of the late 1990s and early 2000s that not only survived the boom and bust of dotcoms, but has thrived, according to CEO Tony Isbell. “The firm was founded in 1999 as a traditional auction company,” Isbell told HNN in a telephone interview. “The online business — RealtyBid.com — was created in 2001, inspired, Isbell said, by the success of eBay’s online auction model.
“We have been exclusively selling properties online since 2001,” he added.
Anniston, AL-native Isbell, who founded the firm with another veteran of real estate auctions, Mike Keracher, from the Birmingham suburb of Hoover, said that bad times for real estate are often good times for real estate auction concerns – especially RealtyBid.com.
The comparison with eBay is only superficial, he told HNN.
“We don’t accept listings from individuals and we don’t have real estate ads, like eBay,” Isbell said. ““We assist real estate agents throughout the nation for homes for sale and we handle foreclosed properties for the top lenders in the nation.”
Foreclosed properties are not identified separately now, but will be in the very “near” future as foreclosures continue to rise, Isbell added.
Isbell and Keracher each have about 20 years experience in real estate auctions, and Keracher, the firm’s executive vice president, is a licensed auctioneer.
Since its founding, RealtyBid.com, with 16 employees, has sold more than 5,000 properties – valued at more than $250 million – in all 50 states, according to the Rainbow City, AL-based firm’s marketing director Daphne Shannon.
Shannon told HNN that, “according to the National Auctioneers Association (NAA residential property auction sales grew 39.2 percent or $4 billion from 2002 to 2005 (from $10.2 billion to $14.2 billion annually).”
“It’s important to note that this phenomenal growth came during a time when the real estate market was extremely healthy, during a time that conventional wisdom would say that real estate auctions shouldn’t have be ‘necessary,’ yet the growth speaks for itself,” she added. “And, with the real estate market now downshifting, we certainly expect that the acceptance and use of real estate auctions, especially online auctions, is only going to continue to grow.”
Shannon: “Also, the NAA recently announced that residential real estate auctions were up 4.5% in the third quarter 2006 over the same time period in 2005. This is an impressive statistic that shows how residential real estate auctions are becoming more integrated into the mainstream of the real estate industry; however, during the same third quarter when the NAA reported an increase of 4.5 percent in residential real estate auctions overall, RealtyBid.com experienced a more than 84 percent increase in online real estate auction sales over the same period in 2005. In other words, the residential real estate auction industry is growing, and RealtyBid.com and online real estate auctions are leading the charge.”
This past July, when national home sales dropped for the eighth time in the last 10 months, RealtyBid.com had a record-breaking 1,000 residential properties nationwide up for bid on its web site, five times the same month in 2005, Isbell added.
Business writers, including one from The Birmingham (AL) News, have taken note of the “Stars Fell On Alabama” state’s homegrown success story, with News writer Roy L. Williams quoting Isbell: “The sheer volume of properties offered each month around the nation keeps the company in the spotlight among agents and investors nationwide…”. Williams went on to say that the firm’s sales volume “ranks it among the top five largest real estate auctioneers in the country.”
RealtyBid.com has garnered publicity in publications as varied as the Los Angeles Times, the (San Jose, CA) Mercury News, The Philadelphia Inquirer, New York’s Newsday, The Wall Street Journal, the Miami Herald, CNNmoney.com, MSNBC.com, Inmannews.com, in addition to the home state The Birmingham News.
Isbell noted that because of RealtyBid.com’s relationship building with real estate brokers, technological savvy real estate agents find it easy to work with the firm. And tech-savvy agents are where it’s at in today’s high-tech, online, wired world.
“RealtyBid.com is an accelerated sales tool for the real estate agent, providing greater coverage for listings – something that real estate brokers need in today’s real estate market,” Isbell told HNN, noting that the firm receives its revenue in the form of a 1 percent Buyer’s Premium based on the selling price of the property, paid by the buyer at closing. “The commission the broker receives comes from the seller, so we’re complementing the agent, not competing with him or her,” Isbell stressed. “We are one of the only online real estate models that is helping the agent and not getting into their pocket.”
He added that very few bidders close the deal without either seeing the property personally or having another person inspect it for them and report back to make sure the property is as advertised.
Isbell: “For the consumer, we are offering great opportunities to purchase homes, condominiums and land and good discounts over retail pricing. All properties offered on RealtyBid.com requires that it be offered with a discounted ‘reserve’ price.”
Isbell is upbeat about the future of online auctions, especially his firm, telling HNN that “We expect to triple our business volume in the next two years.”
As foreclosures “skyrocket” throughout the country, he said he expects more business from that segment of the market. In addition, real estate brokers want to move properties faster, to get their commissions sooner, so that segment will also grow rapidly, Isbell added.
Selling real estate by auction is nothing new to North American rural dwellers and is the preferred way to market real estate in Australia, where 70 percent of houses sold are sold by real estate auctioneers, he added.
So far this year, the top states by volume of properties listed and bid upon are, in order: Michigan, Texas and Georgia, Isbell told HNN. “We also expect to see more properties in places like California, Nevada and Illinois.” Web site: http://www.realtybid.com
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David M. Kinchen began covering real estate in 1970 at The Milwaukee Sentinel and was a real estate reporter at the Los Angeles Times from 1976 to 1990. He has been a member of the National Association of Real Estate Editors since 1971 and was president of NAREE in 1984.
COMMENTARY: The Caribbean at the End of 2006…and Beyond
Posted by kinchendavid on December 31, 2006
By Sir Ronald Sanders
As dusk descends on the Year 2006, the 15 small countries of the Caribbean Community (CARICOM) continued to face daunting challenges in the global community in relation to trade, investment and development assistance.
Banana exports were already badly hurt from the loss of their preferential access to the European Union (EU) market causing pain for small banana growers in rural communities in several Caribbean countries. But, as the year was drawing to a close, Ecuador, which already controls 60 per cent of the world market, launched a new challenge to EU banana regime. It is a challenge Ecuador is likely to win in the long run simply because World Trade Organization (WTO) rules say the days of preferences are done, and CARICOM states have not managed to get themselves into a category of countries which qualify for special and differential treatment.
Therefore, Caribbean banana growers in Belize, Jamaica, St Lucia, St Vincent and Dominica are headed for more difficult times.
The prospects for sugar exports seemed no better. Having lost the preferential price they earned in the EU, the sugar producers in CARICOM countries (Barbados, Belize, Guyana, Jamaica and Trinidad and Tobago) were struggling with ways to transform the industry; but at least some of them are coming to terms with the need for innovation such as ethanol production.
Financial services, particularly off shore banking and insurance, once held out hope for the adjustment of some CARICOM economies; this hope is fading fast. While it is true that there has been growth in the provision of financial services within CARICOM particularly from financial institutions in Trinidad, Barbados and Jamaica, participation in the global economy is shrinking.
Except for the Bahamas and to a certain extent Barbados (which has a special treaty arrangement with Canada), the Organization for Economic Cooperation and Development and the Financial Action Task Force (both creatures of the richest countries of the world), using the International Monetary Fund as a surrogate to implement suffocating rules that suit their own powerful states, have effectively constrained the scope of much of the Caribbean’s financial services sector as a global player. The requirements for regulation, monitoring and enforcement are out of proportion to the scale of money and transactions that pass through the area, and they are eating into profitability.
Current negotiations between Caribbean countries and the EU over Economic Partnership Agreements are sadly lacking in a development orientation. The EU is insistent on the Caribbean opening its markets to European goods, services and investment with little compensatory mechanisms for the dislocation which such opening will cause to local businesses and the losses to governments of tariff revenues.
This situation calls into question policy positions adopted by the region in its negotiating strategies and demands a more radical approach, including a re-examination of the negotiating structures themselves. The negotiations require the expertise of good technical officials, but they also now cry out for political positions to be adopted based on the realities of economic conditions on the ground. As the year ended, there were rumblings within the Caribbean over the internal workings of the negotiation strategy and structure.
Tourism was the one bright spot in an otherwise bleak horizon in 2006. But, the industry boomed in the last three years on the back of a weak US dollar to which many Caribbean currencies are tied. European and other tourism to the region improved simply because the drop in the exchange rate between the US dollar and other major currencies created a de facto devaluation of Caribbean currencies.
Structural changes that are desperately required for tourism, including the promotion of local ownership, enforceable linkages to farmers and local manufacturers, greater pan-Caribbean cooperation in promotion, flight scheduling and hospitality-sharing, are yet to happen. A proposal for a Caribbean Tourism Fund, commissioned by the Caribbean Hotels Association, has been produced by a UK firm, but so far no action has been taken on it.
Global competition not only in its traditional export markets, but also within their own domestic market stared CARICOM countries in the face as 2006 faded away, underlying starkly the absolute necessity to integrate or perish.
At least the year started with six CARICOM countries at last bringing the much promised Caribbean Single Market (CSM) into existence, and, despite the uncertainties that surrounded their decision, the OECS countries joined in the middle of the year.
The Single Market is by no means complete and, unless a range of measures are established by law including common regulatory rules for services and the machinery for integrating production across CARICOM countries, it will be a flawed process giving rise more to contention than to harmony.
A key issue – the freedom of movement of labour – remains off the discussion table, mired in fears of a political backlash for the political party in each country that dares to acknowledge the reality that there can be no genuine single market without free movement of all the factors of production. A great insularity (if not xenophobia) continues to exist among groups within CARICOM countries directed at each other.
Sharp divisions are still part of the relationship between governments and the private sector, on the one hand, and governments and the trade union movement on the other, in many counties of CARICOM. Yet, until there is a symbiotic relationship between these three groups that is built around an agreed strategy for taking forward the Single Market, CARICOM will be marking time in a world where other regions are marching forward.
It is a glaring reality – from which the Caribbean as a whole is yet to learn – that the government negotiators in trade negotiations, whether bilaterally, at the WTO, or through the OECD – are representing the interests of big businesses in their countries who want access to the markets of others on the most advantageous terms while at the same time restricting entry to their own market through the use of non-tariff barriers and other ruses.
The time is now urgent when there must be substantial consultations between Caribbean governments, the Caribbean private sector and the Caribbean Trade Union movement, to determine agreed strategies for trade negotiations in goods and services.
The way in which CARICOM itself is to be governed is an issue that governments continue to duck. For over fourteen years, there has been a blueprint for such joint governance produced by the West Indian Commission. It is a blueprint that would ensure through CARICOM-wide laws that decisions are enforced and not left to languish until the last reluctant government recognizes the value of their implementation.
For fourteen years, some governments have filibustered over the plan, worried, it seems, about the loss of individual national control even though each structure presented so far has resided final authority in councils of ministers drawn from each territory and, of course, in Heads of government themselves.
When CARICOM Heads of Government meet early in 2007, a new report on governance of the Caribbean Community will be before them. It is to be hoped that this time, given the competition that the region is facing in the international community, for trade, investment and aid, they will be emboldened to put the necessary machinery in place.
One thing is for sure: if the Single Market is not completed in all its aspects, and the governance of the community remains unsettled, the prospect of a Single Economy in 2008 – which is a far more ambitious even though vital project – will dim as it drifts into the distance.
CARICOM can not afford the delay. And, it can no longer live on the laurels of being one of the most advanced regional integration movements in global society. Events in world trade, in business competitiveness, in science and technology are overtaking it. Real empowerment has to be given to the regional integration structure if it CARICOM and its member states are to advance. If such empowerment does not occur, some of the more progressive member states will break out on their own, and the regional process will wither on the vine.
Already some governments of CARICOM countries believe that, in their individual interest, they should be entering bilateral trade and investment relationships with countries such as the US, Canada, India and China. Countries such as Trinidad and Tobago, which have resources – particularly oil and gas – in which these larger countries are very interested, may not long tolerate the constraints of a slow moving and indecisive CARICOM.
The Single Market will also continue not to fulfill its promise to farmers and manufacturers in CARICOM until governments pay serious attention to transportation within the region by developing a common and enforceable transportation policy. It is not a tribute to CARICOM that after 33 years of existence, the agricultural and manufacturing production of CARICOM states can not be transported within the region. Yet, both farm products and manufactured goods can be brought to individual countries through the United States.
It should be noted that the region’s bill for food imported from outside the areas is now US$3.6 billion.
A policy of CARICOM wide incentives for creating a shipping industry within the region is non-existent. But, if the market were to be developed to include all the CARICOM countries plus Cuba and the Dominican Republic, a profitable investment opportunity surely presents itself.
In the meantime, the absence of an agreed policy has made a complete mess of regional air transportation. As 2007 dawns, neither tourism to the region nor Caribbean travelers within the region can feel secure. Instead of one regional airline – or at least a merger of some of the costly activities of individual carriers – national carriers are continuing to compete among themselves. Caribbean Airlines, the successor to BWIA, will compete with the new airline that emerges from negotiations between LIAT and Caribbean Star; Air Jamaica will compete with Caribbean Airlines on traffic from the US into the Caribbean; and Caribbean Airlines operations from the United Kingdom will have no Caribbean identity as British Airways aircraft takes BWIA’s place in a code sharing deal.
The arrangements in air transportation have been reached by individual governments. It seems no government is willing to offend other governments by insisting at a CARICOM level on an air transportation policy. So, in the name of national pride or national control, the gains that could result from regional cooperation go by the way side.
At the root of this lack of progress in deepening CARICOM’s integration arrangements are two things: political pandering to, if not exploitation of, the fears by groups within national communities that they will be swamped by an influx of other Caribbean nationals into their territory; and a failure to explain effectively that CARICOM should be a single space, like the United States, where people, production, and capital of each state move freely just as, for example, the people, production and capital of Texas move to New York.
2006 witnessed a small step forward in this process when the basic foundation of the Caribbean Single Market was laid. Beyond 2006, CARICOM must deepen the integration process and must, particularly, facilitate the integration of the factors of production to make Caribbean economies more competitive in the global economy.
It is urgent that the mental construct of national boundaries be broken down and replaced with a realistic understanding that for the people of CARICOM to survive the onslaught of global competition, CARICOM must be a single landscape.
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Sir Ronald Sanders is a business executive and former Caribbean Ambassador to the World Trade Organisation who publishes widely on Small States in the global community. He is a regular contributor to Huntington News Network. Responses to: ronaldsanders29@hotmail.com
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